Some interesting reading.Buy with both handsBob MoriartyMar 24,...

Some interesting reading.


Buy with both hands
Bob Moriarty

Mar 24, 2008


http://www.321gold.com/editorials/mo...rty032408.html



I spent ten days trying to warn people of an upcoming violent correction. It wasn't popular because it was so contrary to what people think. That's how and why I made it. When you can't buy a silver bar because the demand is so high, you are at a top. When do you expect to run out of silver bars? At a bottom?

We have had our violent correction. The number of gold contracts and silver contracts were at record highs. Before this correction ends, I expect to see those numbers cut, perhaps in half. Most of the damage has been done to gold and silver but another month or so of correction would be about right.

That said, another technical indicator that I put a lot of value in is also at an extreme of emotion. I use a chart of the XAU over gold as a pure measure of psychology. Investors can either invest in gold or in gold shares. This index shows the ratio between them. When people are very bullish on gold the number is high, when people are very bearish on gold shares, the number is low. It tends to show turning points for both gold and shares but it isn't perfect. It didn't predict last week's carnage but bullish consensus and the number of contracts outstanding did.

This is going to be a really weird prediction. Last week I nailed the biggest and fastest gold and silver correction in history. It was the best call anyone has made for 28 years on gold. This week I'm going to predict gold shares are going to explode upwards starting immediately. ESPECIALLY the juniors.